Common FALL 2010
The professional provider of education, advocacy and resources for Community Associations
Security, Your Community & Your Home SAFE & Secure page 6 Order and Protection page 12 What's in a Name? page 18
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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2010 Event Calendar All dates, times and locations subject to change. Please visit our website, www.cai-sd.org, for an updated calendar.
J a n u a ry
July
21-23 21-23
21
PMDP M-100 Course CA Law Seminar – Tucson, AZ
F e b r u ary
August
5 Trade Show DoubleTree Hotel Mission Valley Legal Update 2010 27 Essentials of Community Association Volunteer Leadership
18 Day at the Races Del Mar Race Track 27 Trade Show DoubleTree Hotel TBA
March
Septem ber
3 Morning Educational Program HOA Board Elections Can Be Fun!! 12 Billiards Tournament Jolt ‘n Joes La Mesa 26 CID Law Course Courtyard by Marriott
10 Morning Educational Program Dealing with Dysfunctional Boards 17 CAI San Diego Golf Classic Coronado Golf Club 22-23 PCAM Case Study 22-25 Large Scale Managers Workshop Reston, VA
April
Octo ber
12 Legislative Day in the Capitol Sacramento, CA 16 Educational Conference & Trade Show DoubleTree Hotel Topics TBA 28-May 1 CAI National Conference Las Vegas, NV
1 CID Law Course Courtyard by Marriott 8 Trade Show DoubleTree Hotel Mission Valley 9 Essentials of Community Association Volunteer Leadership 14-15 M-320 – High Rise Management 29 Statewide CAI Law Conference Irvine Marriott
M ay 7 21
Monte Carlo Night Kona Kai Resort Morning Educational Program Budgeting & Reserves
June
2
Morning Educational Program Getting the Most Out of Your CAI Membership Courtyard By Marriott
No vem ber 5 Morning Educational Program Almost Free Legal Advice Courtyard by Marriott
2 Trade Show Hollywood Esquires DoubleTree Hotel
18-19
24-26
3 Holiday Award Luncheon & Trade Show DoubleTree Hotel Mission Valley
CEO-MC Retreat Chicago, IL
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
PMDP M-203 Course
Dece mber
Contents Features
Departments
6 Safe & Secure
2 Chapter Event Calendar 4 President’s Message
Contributed by The San Diego Police Department
12 Order & Protection: Exploring Protective Mechanisms for HOAs Regarding Registered Sex Offenders
by Laurie S. Poole, Esq.
by Chris Hodge, PCAM
16 CLAC Donations Honor Roll 22 Renewing Members 34 Homeowners Corner
A Case Study: Review/Audit of Financial Statement and Other Board Actions
Chapter News 24 Monte Carlo Night
21 May 21 Morning Educational Program 40 April Trade Show and Conference 41 June Trade Show 42 What’s New in San Diego 44 Service Directory
by Sam Dolnick
38 New Members ack Cover B 2010 Marketing Plan Members
18 What’s in a Name?
by Kimberly Lilley, CMCA, CIRMS
by Pamela Hazard, CMCA
by Jennifer James,Esq.
26 Proactive Fraud Prevention 32 Complying with the New Federal Lead-Based Paint Rules
42 A First Class Board: It Is Closer Than You Think
By Any Ferrell, CCAM, AMS
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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pr e s i d e n t ’ s
mess age
We’re Coming into the Home Stretch
Common
EXECUTIVE COMMITTEE Chris hodge, pcam...................................... PRESIDENT Elite Community Management Cyndi Koester, PCAM........................ President Elect Mutual of Omaha Bank Louise stettler.....................................Vice President Epsten Grinnell & Howell, APC
Wow – can you believe we’re nearing the 4th quarter of 2010? Things are moving along very nicely for our chapter. We have had several programs and events that have been well attended and have received great reviews by our members.
Chris Hodge, PCAM is a Community Association Manager Member who has worked at Elite Community Management for the past 15 years. He holds the designation of PCAM through the Community Associations Institute. Mr. Hodge is the 2010 President of the CAI San Diego Chapter. He previously served on the Board of Directors for six years and was the Chapter President in 2002. He has served on various committees and is also a director of the Baker/ Dolnick Education Foundation.
The next big social event will be the Golf Tournament to be held on September 17, 2010, at the Coronado Municipal Golf Course. The invitations have already been mailed. If you did not receive a registration form please contact the chapter office, or visit our website at www.cai-sd.org. Your sponsorship and involvement is important to the success of CAI-San Diego. I thank those of you who have sponsored the golf tournament this year. We recently held our annual Day at the Races and it was a huge success. Look for pictures in our next issue of Common Assessment. Thank you to those who sponsored Day at the Races and to the committee for putting together another great event. As we draw near the end of 2010, I would like to remind you that it is time to nominate your colleagues for our annual Chapter Awards. Our Awards Nomination committee has spent a great deal of time this year reviewing and revising the awards categories. I strongly urge you to pick up nomination forms at our next event, or download them off of the website, and nominate your peers. Winners will be recognized, along with all chapter volunteers at our Annual Awards Luncheon and Trade Show on December 3rd. Don’t miss it!
tina rozycki, CMCA..................................... treasurer Curtis Management Marie Donovan............................................ secretary Homeowner DIRECTORS DAVE ABRAMS... Community Association Manager Member Jim Fraker, PCAM..... Professional Community Management Elizabeth French, Esq........... Green, Bryant & French, LLP Elaine Gower........................................................Homeowner Kimberly Lilley, CMCA, CIRMS....Berg Insurance Agency, Inc. JASON PAYNE..................................Payne Pest Management Rick Salpietra, ESQ......... Law Offices of Richard Salpietra Karina Tatum...................... SD Preferred Property Managers
CHAPTER Executive DIrector barbara ozenbaugh, CMP 619-299-1376 Managing editor barbara ozenbaugh, CMP 619-299-1376 New & Renewing Advertising sales Barbara Ozenbaugh, CMP 619-299-1376 design & production Kristine GAITAN Rey advertising & design / The Creative Dept. 760-746-8700 Magazine EDITORIAL committee CYNDI Koester, PCAM, CHAIR...... Mutual of Omaha Bank kimberly LILLEY, CIRMS................... Berg Insurance Agency jim danow, Esq.................Epsten Grinnell & Howell, APC Sam Dolnick......................................................Homeowner Any Ferrell.................................................... N.N. Jaeschke Lesley Finch....................................... Lindsay Management JEFF French, ESQ...................Green, Bryant & French, LLP Laurie Poole, ESQ........................ Peters & Freedman, LLP Barbara ozenbaugh, CMP...Chapter Executive Director tina rozycki......................................... Curtis Management LOUISE Stettler..................... Epsten Grinnell & Howell, APC KEVIN WEXLER................................................... Summit Security All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Common Assessment Magazine or the Community Associations Institute – San Diego Chapter. Information contained within should not be construed as a recommendation for any course of action regarding financial, legal, accounting or other professional services and should not be relied upon without the consultation of your accountant or attorney. Common Assessment Magazine is the official quarterly publication of the San Diego Chapter of the Community Associations Institute. CAI San Diego Chapter encourages submission of news and articles subject to space limitation and editing. Signed letters to the editor are welcome. All articles submitted for publication become the property of CAI San Diego Chapter. Reproduction of articles or columns published permitted with the following acknowledgement: “Reprinted with permission from Common Assessment Magazine, a publication of the Community Associations Institute San Diego Chapter.” © 2010 CAI - San Diego Chapter
Advertising & Correspondence should be sent to: Common Assessment Magazine CAI - San Diego Chapter 1081 Camino Del Rio South, Suite 207, San Diego, CA 92108 619-299-1376 / fax 619-299-1377 / www.cai-sd.org
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
Community assoCiation Counsel assessment reCovery
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C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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Safe &
b
Contributed by the San Diego Police Department
urglary is most often a crime of opportunity. The following excerpt is from the City of San Diego Police Department and contains tips on preventing home burglaries, vandalism, and other property crimes by controlling access, providing visibility, and maintaining your property. It also contains tips on protecting your home and property when you are away and providing information you might have on residential burglaries. And if you do become a victim, it includes tips to make sure the police find your home and to identify your property. Following these ideas can significantly enhance the security of your home and property.
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
& Secure
Controlling Access The following tips suggest how access to your home, apartment, or condo can be controlled by physical protection, deterrent measures, burglar alarms, and various security procedures.
Physical Protection Measures • Install single cylinder dead-bolt locks on all doors. Bolts should have a minimum throw of 1 inch. Strike plates should have screws that are at least 3 inches long. Doors should be solid hardwood or metal clad. Hinges should be located on the inside or have nonremovable pins. Special locks are needed on double and Dutch doors. • Install locking devices on all sliding glass doors and windows. • Install good locks on all doors that lead outside through garages or storage areas. • Don’t rely on chain locks for security. They’re only good for privacy. • Re-key or change all locks when moving into a new home. • Install locks on gates, garages, sheds, etc. • Go to a locksmith or hardware store for advice on locks. • Reinforce the glass in windows on the lock sides of doors so a burglar cannot break them and reach in to open the door. • Consider installing security bars on side, rear, or other windows that a burglar might break to enter your home. Bars must comply with Fire Code requirements for inside release to permit an occupant to escape in the event of a fire. • Fence-in the yard. • Install a good side-yard gate and keep it locked at all times. Side and back entries are the most common access points for burglars. • Plant bushes with thorns or prickly leaves near windows and along fences. • Trim trees so that limbs don’t provide access to roofs, second stories, etc. Call the SDPD CRO in your area to arrange for a free home security survey. SDPD division addresses and phone numbers are listed under IN YOUR NEIGHBORHOOD on their website. Continued on page 8
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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• Make sure you understand your service contract, all the points of protection and the equipment to be installed, the initial and monthly payments, and the warranty period. • Inform your insurance company. You may qualify for a discount. • The system should also have a fail-safe battery backup. Check the batteries periodically and replace them if necessary.
Security Procedures • Keep all doors and windows locked, even if you are just going out “for a minute.” If a window is left open a few inches for ventilation, pins or dowels should be inserted in the tracks to prevent someone from opening it more. safe & secure Continued from page 7
• Lock gates, garages, and sheds after they reduce false alarms, which are wasteful of police resources and
each use. • Store bicycles, mowers, ladders, etc. in a
Deterrent Measures
lead to fines and permit revocation.
locked garage or shed, or secure them
• Put Neighborhood Watch, alarm
(See Sections 33.3701-33.3723 of
to some stationary point.
company, and Operation ID stickers on
the San Diego Municipal Code for
entry doors and windows.
burglary alarm business and agent
• Consider having a dog that can scare
requirements and responsibilities,
• Don’t leave notes on your door when you are away from home. • Don’t leave keys in mailboxes or
a stranger away by either barking or
alarm user permit requirements, etc.
planters, under doormats, or in other
looking fierce. Keep an outside dog in a
Call SDPD Permits and Licensing at
obvious hiding spots. Leave an extra key
fenced area and have a good lock on the
(619) 531-2250 about obtaining an
with a neighbor.
gate.
alarm permit.)
• Use fencing, gates, landscaping,
• Get alarm company references from
• Learn to recognize who belongs in your neighborhood, development,
pavement treatment, signs, etc. to define
friends or neighbors. Get at least three
or apartment, i.e., residents, workers,
clear boundaries between your property
estimates in writing. The SDPD does
guests, etc.
and adjoining properties.
not prefer or recommend companies, brands, or types of security systems.
Consider Installing a Monitored Home Alarm System
• Know who’s at your door before opening it. Check photo registration card before
• Make sure the alarm company has a
dealing with any solicitors, peddlers,
City Business Tax Certificate and is
interviewers, etc. These persons are
• Alarm systems usually include one or
licensed by the State of California. You
required to obtain a card from the
more of the following components:
can verify the latter by calling the State
SDPD and display it on the front of their
photocell or magnetic contacts on doors
of California Bureau of Security and
clothing. They are allowed to solicit only
and windows, heat or motion detectors
Investigative Services at (916) 322-4000 or
between 9:00 a.m. and 8:00 p.m. except
in interior spaces, glass break detectors,
going online at www.dca.ca.gov/bsis.
• Be suspicious of persons making
status of the system, and audible alarms.
the monitoring station is open 24/7
unsolicited offers of services.
All equipment should be Underwriters
and has backup power. The company’s
Laboratory (UL) certified.
customer service department should also
want any solicitor to ring your door bell,
be open 24/7.
knock on your door, or make any other
• Multiple sensors are preferred because 8
by appointment.
• If your system is monitored, make sure
keypads with a means of checking the
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
• Post a NO SOLICITING sign if you don’t
sound to attract your attention. • Ask for photo identification before letting in anyone you don’t know. Check out the identification with the company or agency if you are suspicious. • Never let a stranger enter your home to use the telephone. Offer to make the call yourself in an emergency. • Don’t give your name, phone
Keep a detailed, up-to-date record of your valuables. Include type, model, serial number, proof of purchase and fair market value.
number, or whereabouts on your answering machine message. Never say you aren’t home. Just ask the them at home unless you have a security
week. While I was in there I unlatched
closet or a safe that is well hidden and
the back window to make my return a
chain with your vehicle keys when you
cannot be removed.
little easier.
use valet parking. Also, don’t leave
Here are some things burglars won’t
caller to leave a message. • Don’t leave your home keys on a
• Those nice yard toys your kids leave out
your garage door opener where it is
tell you. They come from interviews with
make me wonder what type of gaming
easily accessible. Keep your vehicle
convicted burglars.
system they have.
registration, proof of insurance, and any
• Of course I look familiar, I was here just
other papers with your home address on them where a criminal is not likely to find them. • Don’t give housekeepers, babysitters, or
last week cleaning your carpets, painting your shutters, or delivering your new TV. • Thanks for letting me use the bathroom
• I might leave a pizza flyer in your front door to see how long it takes you to remove it. • If glass is part of your front entrance, Continued on page 10
when I was working in your yard last
others working in your home access to your home keys or alarm codes. • Call the police on 911 if you are at home
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and hear or see something suspicious. Examples of suspicious activities are listed in the SDPD pamphlet on Reporting Crimes and Suspicious Activities. Don’t take direct action yourself. An officer will be dispatched to your address even if you cannot speak or hang up. • Don’t go in or call out if you return home and suspect someone has broken into your home, e.g., if a window or screen is broken, a door is ajar, or a strange vehicle is parked in the driveway. Go to a neighbor’s home and call the police. • Don’t discuss your assets or finances with strangers. • Don’t keep large sums of money at
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C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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Safe & Secure
doesn’t hear it again he’ll just go back to
Continued from page 9
what he was doing. It’s human nature.
don’t let your alarm company install the control pad where I can see if the alarm is set. • If you don’t alarm your windows, install motion detectors in the rooms I might enter, including the master bedroom where you usually keep your jewelry and home safe. • Don’t forget to lock your doors and turn on your alarm when you go out in bad weather. I work on those days too. • I don’t understand why you would you
• I love looking in your windows. I’m looking for signs that you’re home and
and make climbing more difficult. • Install a wide-angle peephole in your front door so you can look out without being seen yourself.
for flat screen TVs or gaming systems I’d like. I’ll drive or walk through your
Maintaining Your Property
neighborhood at night before you close
• Keep property in good condition and
the blinds just to pick my targets.
free of trash, litter, weeds, leaves, graffiti,
• A window open a little to let in a little
dismantled or inoperative vehicles, and
fresh air during the day is an invitation for me to come in. If you do that put
other things that indicate neglect in caring for your property.
something in the track that prevents
• Replace broken windows or screens.
someone from opening it wide enough
• Repair broken fences and gate locks.
to get through.
• Use screens, wired glass, or other protection for light fixtures and bulbs.
pay all that money for a fancy alarm system and leave your house without setting it. • I always knock first. If you answer, I’ll
Set your burglar alarm and notify your alarm company that you will be away. Then if an alarm occurs the company will not call your home first to verify the alarm; it will notify the police directly.
ask for directions or offer to clean your windows. But don’t open the door or take me up on it. If you don’t answer I’ll try the door. Occasionally I hit the jackpot and walk right in. • Do you really think I won’t look in your sock drawer? I always check dresser drawers, the bedside table, and the medicine cabinet. But I almost never go into kids’ rooms. • I won’t have enough time to break into that safe where you keep your valuables. But I’ll take it with me if it’s not bolted down. • A loud TV or radio can be a better deterrent than the best alarm system. If you don’t want to leave one on while you’re out of town, use a timer that turns it on when you usually watch or listen to it. • Sometimes I carry a clipboard. Sometimes I dress like a lawn guy. I do my best not to look like a burglar. • The two things I hate most are loud dogs and nosy neighbors. • I’ll break a window to get in even if it makes a little noise. If your neighbor hears a loud sound he’ll stop what he’s doing and wait to hear it again. If he 10
Providing Visibility • Leave outside lights on after dark or have outside lights controlled by a
• Remove loose rocks and other objects that could be used to vandalize your property.
motion detector. Make sure there are no or yard in which a person could hide.
Protecting Your Home and Property When You Are Away
Street lights are generally inadequate for
• Use timers on lights, radios, TVs, etc. to
dark areas around the house, garage,
illuminating your property. • Check lights regularly and replace burnt out bulbs. • Trim bushes to less than 3 feet to eliminate possible hiding places, especially near windows and sidewalks. • Trim tree canopies to at least 8 feet to allow visibility into your property. • Replace solid walls in front yards with open fencing to eliminate hiding places
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
make them go on and off during the day and night to make your home appear occupied. • Stop mail and newspaper delivery, or have neighbor pick up anything left at the home. • Keep grass watered and cut. Water and trim other landscaping. • Ask the neighbors to watch your home and report any suspicious activities.
• Leave your itinerary with a neighbor so you can be contacted in an emergency. • Disconnect your electric garage door opener and padlock the door, preferably on the inside. • Visit your local SDPD Area Station to request vacation home checks when you’ll be out of town. • Set your burglar alarm and notify your alarm company that you will be away. Then if an alarm occurs when you are away the company will not call your home first to verify the alarm; it will notify the police directly. Also provide the alarm company with an up-to-date list of persons to contact about the alarm and the need to secure your home after a burglary.
Providing Information on Residential Burglaries If you have any information that might help solve a burglary and lead to the arrest of the burglar, call your local SDPD Area Station and ask to speak to the detective handling the case. Or you can call Crime Stoppers at its 24-hour hotline at (888) 580-8477 and provide information anonymously. The operator on this will take your information and give you a code number. If your information leads
PETERS ATTORNEYS AT LAW
&
FREEDMAN,L.L.P.
to an arrest you could earn a reward of up to $1,000. The operator will explain how you can use your code number to give additional information and how to collect your reward. You can also provide information by e-mailing from www. tipsubmit.com or by text messaging from a cell phone to CRIMES or 274637,
A full service law firm dedicated to representing community associations
Experience you can rely on... People you can trust
with Tips409 at the beginning of the message. Crime Stoppers is a citizenoperated, non-profit organization that works in partnership with local, state, and federal law enforcement agencies to help
Encinitas Office
Desert Office
(760) 436-3441
(760) 773-4463
www.hoalaw.com
mail@hoalaw.com
solve serious crimes. It gives community members an opportunity to fight crime without “getting involved.” Continues on page 39 C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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Order & Protection
Exploring Protective Mechanisms for Homeowners Associations Regarding Registered Sex Offenders
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
By Laurie S. Poole, Esq.
cross the nation, there is a heightened concern of sex offenders living in our communities. Here in San Diego, the issue is front and center, especially due to the recent tragic events regarding two North County teenagers. For homeowners associations, perhaps it is not surprising to now ask what methods, if any, can be taken to protect their communities.
Homeowners associations have taken various steps to address this issue. Some California homeowners associations have included on their websites or in newsletters warnings of potential sex offenders in the neighborhood and have included links to the California Attorney General’s “Megan’s Law” website on their association websites. Other associations have taken more drastic measures. The Rancho Vista Homeowners Association in Palmdale, California, places pictures of sex offenders who live or have lived in the neighborhood on its website. The website includes a disclaimer that the association does not condone any violation of the law and the information is for “your family’s protection only.” California Penal Code section 290 requires mandatory registration as a sex offender for persons convicted of offenses listed in that section. There are 169 sex offenses which require registration in California. In addition to the offenses listed in section 290, the court may order someone to register as a sex offender if the criminal offense committed was sexually motivated. California’s “Megan’s Law” website identifies location and identity of the registered sex offender. California makes it a criminal offense to use sex offender registrant information on the Attorney General website for any purpose other than protecting a person at risk. Examples of prohibited uses include: insurance, loans, credit, employment, education, or housing. Though all sex offenders have to register, certain offenses may qualify for exclusion from the Attorney General website. Approximately twenty-five percent of all registered sex offenders are excluded from public disclosure by law. Additionally, California courts have ruled that sex offender registration is unconstitutional for certain offenses (e.g., misdemeanor lewd conduct and indecent exposure). Perhaps the most aggressive approach has been adopting amendments to the governing documents banning registered sex offenders from living within the association.
Continued on page 14
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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Protective Mechanisms
a service to prevent registered sex
to permit the reviewing court to reach a
Continued from page 13
offenders from living in neighborhoods.
decision. However, the appellate court’s
The Pines of Greenwood is believed to be the first association in Indiana to ban sex offenders. The association added the ban to the subdivision’s covenants, but it was not used to evict sex offenders living in the subdivision when the ban passed. The American Civil Liberties Union of Indiana stated that the ban was legal and the organization would not pursue a lawsuit to challenge the ban on substantive grounds. In Cuyahoga County, Ohio, more than one hundred homeowners associations restrict sex offenders from moving into their communities. A developer in Lubbock, Texas marketed the community it was building to require that homeowners pass criminal background checks and no convicted sex offenders would be allowed. The Cranberry Township Homeowners Association, near Pittsburgh, Pennsylvania, consulted with an attorney to help identify methods to keep sex offenders from living in the homeowner’s association. To facilitate bans on registered sex offenders, at least one website advertises
The question raised by these
discussion of the owner’s objections to the
illustrations is whether these bans on
sex offender ban provides insight to the
registered sex offenders are legal. As
legal issues raised.
with much in the law, the answer is
First, the owner claimed that the sex
unclear. There is no published decision in
offender ban was an unlawful infringement
California that has addressed this issue.
on her right to alienate (i.e., sell or lease)
However, the New Jersey case of
her property. In rejecting this assertion, the
Mulligan v. Panther Valley Property
court noted that in New Jersey, there were
Owners Association, 766 A.2d 1186 (N.J.
only 80 Tier 3 registered sex offenders and
Super. Ct. App. Div. 2001) addressed
that the ban would apply to all members
issues regarding a ban on registered sex
of the association equally. This would
offenders. In that case, a homeowners
be a tougher argument to overcome in
association adopted an amendment to its
California as there is no similar “tier”
CC&Rs which provided that no individual
classification of sex offenders based on
registered as a “Tier 3” offender under
seriousness of the offense. According to
New Jersey state law could reside in the
the California Attorney General’s website,
association. In New Jersey, Tier 3 sex
there are 63,000 persons required to
offenders are deemed to have a high risk
register in California as sex offenders.
of re-offending. An owner challenged this,
These numbers could bolster an argument
and other amendments, adopted at the
that having a sex offender ban in
same time.
California is an unreasonable restraint on
The trial court upheld the amendment which banned the Tier 3 sex offenders and the owner appealed. The New Jersey
alienation, which California law does not allow. The owner’s second argument was
Appellate Court declined to rule on the
that the ban compelled her to violate the
issue, claiming that the parties did not
law by seeking out Tier 3 sex offenders.
create a sufficient record in the trial court
Since there was nothing in the ban which
Homeowners associations that are considering adopting bans on registered sex offenders need to consider the possible liability, be aware of the likelihood of potential legal challenges that may ensue and consult with legal counsel.
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
required the owner to seek out Tier 3 sex offenders, this claim was also rejected. However, the appellate court noted that the third claim, that the ban violated New Jersey public policy, may have merit. The court raised concerns about the potential injury in making a large segment of New Jersey housing unavailable to sex offenders and that these actions may lead to “vigilantism and harassment.” Also, the court noted that if the homeowners association performed quasi-municipal functions, it could open the door to possible constitutional challenges. The concept of homeowners associations in California as being quasi-governmental has been raised in past decisions. Due to the lack of information in the record, the appellate court ultimately reversed the portion of the trial court’s judgment upholding the validity of the sex offender ban. Yet it is important to note that the appellate court did not rule on the merits of the issue, so the question is still unanswered. In California, an amendment to CC&Rs to ban registered sex offenders would likely be analyzed using the test established by the Supreme Court in Nahrstedt v. Lakeside Village
Professional. Capable. Friendly.
Condominium Association (1994) 8 Cal. 4th 361 and one of the prongs of the test is determining whether the restriction violates public policy. While associations could argue that these restrictive equitable servitudes are reasonably linked to the protection of the children in the homeowners association, as indicated in the New Jersey case, there are other legal concerns. Possible future challenges to a ban on registered sex offenders include:
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(a) Classifying homeowners associations as quasi-governmental organizations because they function as rule-making public entities. The restrictive covenants would be subjected to a full constitutional analysis, including first Continued on page 16 C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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Protective Mechanisms
SAN DIEGO 2010 CAI-CLAC HONOR ROLL By Sam Dolnick, CAI-CLAC Delegate-at-Large
This is the second year that the CAI-CLAC Honor Roll is being presented. All individuals involved in common interest communities, whether they are associations, homeowners, professionals, managers or business partners who have contributed funds to CAI-CLAC in 2010 on behalf of common interest communities to assure that our voice is heard in the halls of the California legislature are to be congratulated. CAI-CLAC monitors legislation regarding common interest developments (condominiums, planned developments, stock cooperatives and community apartment projects) that the legislators are asked to deliberate and vote upon each year. Each issue of Common Assessment features the names of the contributors and those individuals responsible for obtaining the contribution. ABSOLUTELY NO FUNDS are given to any political party or to any candidate. All funds are used solely for issue oriented legislation affecting CIDs. However, our legislative advocate must be paid and items like stamps, stationery, phone calls, rent, maintenance of web site and other similar expenses must be paid. Our congratulations and thanks to the following contributors from January 1 to June 30, 2010. 2010 Goal = $28,528 • Contributions to Date $21,486 Andalucia Townhomes HOA Lisa Isaacson AMS CCAM
Ocean Hills Summit HOA Mike Mazur
Anderson & Kriger, Joel Kriger
Ocean Terrace/Spinnaker Ridge Frank Lombard
Association Reserves San Diego LLC Matthew Swain Brookfield HOA, Jim Martin
O’Connell Landscape Main Eric Shephard
Continued from page 15
amendments and fourteenth amendment substantive due process violations of the sex offender’s rights; (b) Separately challenging these restrictive covenants as violating the fundamental public policy of California; and (c)Enforcing a sex offender ban could involve “state action” which could result in higher scrutiny of the action taken. In addition to the legal questions arising from instituting a registered sex offender ban in the governing documents of a homeowner association, other practical questions also need to be answered. For example, are homeowners going to be required to obtain background checks on potential buyers before selling their homes? What happens if a family who resides in a neighborhood for years has a child that becomes a sex offender? What happens if a family takes in a foster child that is a sex offender? Will the family be fined or forced to abandon
Pacific Green Landscape Inc.
fostering? These questions are difficult
Pacific Western Bank, Ken Carteron
and have yet to be fully addressed in a
Clean Earth Restoration
Payne Pest Management, Willie Payne
legal context.
Victoria Cohen
Popular Association Banking
Community Association of Bernardo Height Becky Groenwold
Restoration Management Company
CAI San Diego Chapter Barbara Ozenbaugh CMP
Coronado Shores Condo Assn #6 Jim Liese CMCA AMS CCAM CMI Sam Dolnick Emergency Services Restoration Heather Flores Padron Fienberg Grant Mayfield Kaneda & Litt Genesee Highlands Richard Harman il Palio HOA Lisa Isaacson AMS CCAM Interiors by Design, Geri Musser La Jolla Soledad West HOA Lisa Isaacson AMS CCAM La Mesa Colony HOA, Alicia Lloyd Lake Park Condominium Assn Zelma Hall CMCA MC Painting, Lisa Isaacson AMS CCAM Nautilus General Contractors
Riviera Del Mar Arch. Comm. Corp. Betty-Ray Wilson
In short, homeowners associations that are considering adopting bans on registered sex offenders need to consider
Rock Springs East COA, Dawn Walters
the possible liability, be aware of the
SBS Lun Services, Mitch Willet
likelihood of potential legal challenges
Seven Oaks Mgmt Corp #4, Gerie Vellios
that may ensue and consult with legal
The Missions @ Ivey Ranch, Connie Cain Vermont Villas Condo HOA, Dawn Walters Villa Marbelle HOA, Robert Donaldson Villa Trieste at Del Oro Hills MA
counsel. Short of enacting a ban on registered sex offenders, there are other steps that a
Villa Trieste Master
homeowners association can undertake to
Village Park Townhome Corp #3
be proactive in dealing with potential sex
Wells Fargo Bank, Mark Durazo
offenders, such as providing information
West Park Owners Assn, S. Dale Hess
on the association’s website and informing
Westturf Landscape Mgmt
owners as to how they can obtain
Wild Rose Ranch CA
information about registered sex offenders
Woodbridge Estates HOA Lisa Isaacson AMS CCAM
in the community. Other actions involve forming “block watch” organizations where the captains of these organizations receive current and detailed information
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
on area sex offenders.
C e l e b r at i n g O u r 3 7 t h Y e a r
If an association is made aware of a registered sex offender in the neighborhood, steps should be taken to verify the accuracy of the information,
We know the
measure the threat and, if necessary,
difference
disclose the information in a written letter to the homeowners detailing steps they
between getting
can take and the legal limitations of the homeowners association. Due to the
the job done
risk of defamation and libel claims, such
and getting it
actions should only be undertaken after close consultation with the association’s
done right.
attorney. With any action taken in regard to registered sex offenders, associations
Full Service Community Management
need to be aware of the potential for harassment of individuals living in the community as a result of information received and promulgated. Obtaining guidance from legal counsel is essential.
800-227-6225
Laurie S. Poole has been an attorney with Peters & Freedman, LLP since 1993. Peters & Freedman has offices in Encinitas and Palm Desert. Ms. Poole can be reached at lpoole@hoalaw.com.
S a n D i e g o • C h u l a V i S ta • C a r l S b a D • m u r r i e ta
www.waltersmanagement.com
Walsh-HOA ad / Pub:CAI San Diego Common Assessment / Run Date: 5-1-10 / Size: 7.5 X 4.75/ 4C 0UBC8346COM_WalshHOA
You’re building value in a tough real estate market. With the pressures of a challenging economy, Ed and Ilona Walsh of Walsh Property Management turned to Union Bank® to achieve maximum efficiency from their day-to-day operations. Together, we remodeled Walsh’s assessment collections with a customized HOA lockbox solution that dramatically reduced sorting and processing times from days to just minutes. And their associations feel secure knowing that their funds are covered above FDIC limits with CoveragePlusSM deposit insurance. Through improvements like online services that streamlined operations, and support from our HOA customer service specialists, Walsh has grown their business without incurring additional overhead. For Ed and Ilona, it’s a banking relationship that gives them real value. Ed and Ilona Walsh, Owners, Walsh Property Management
To put our HOA Banking expertise to work for you, visit us at HOAbankers.com or call us today. Western Region: Jolen Zeroski, 800-669-8659 Jason Lee, 800-660-4053 Stephanie Shade, 800-660-4053
National Sales: Mickel Graham, PCAM 866-210-2333 Pamela Hazard, CMCA, Team Leader 800-669-8659
CoveragePlusSM deposit insurance is not connected with or guaranteed by the FDIC. CoveragePlusSM protects against the risk of bank insolvency and no other risk. Restrictions apply. Ask your relationship manager for details. HOAbankers.com
©2010 Union Bank, N.A.
49401_SDN.indd 1
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 04/1/10 10 12:17:50 17 PM
g
by kimberly lilley, CMCA, CIRMS
oing through your association’s paperwork you may have found reference to a fidelity bond. Or maybe it was crime coverage? Or fidelity insurance? Employee dishonesty? Is it so complicated that
they have to give it all of these different names? Don’t let the nomenclature get you down. This coverage is in place to make the association whole again if someone decides that Jamaica looks lovely this time of year and the reserve account has just enough money in it to fund the trip. As we all know, maintaining an association without reserve funds is practically impossible. This type of coverage helps prevent a rather dramatic assessment to the members if that kind of theft were to occur. Continued on page 20
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
Wh
hat’s In A Name?
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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What's in a Name?
backing an estimated 30% of loans) has
money from the association. Here are a
Continued from page 19
the higher requirement of three months
few suggestions:
of aggregate assessments for all units
• Require the signature of two board
The age-old question is: how much should we be insured for? When it
PLUS reserves. Between the governing
comes to insuring physical property like
documents and the Federal Government
a building, a building cost estimator is
regulations, be sure you meet the HIGHER
used, and it makes practical sense- you
requirement.
insure the building for how much it would
members on checks withdrawing money from the reserve accounts • Make sure checks are signed manually (not rubber-stamped)
If you think about it, it makes sense:
• Confirm supporting documentation for
cost in that city at that time to rebuild the
you want to be able to replace the
structure. (We don’t bother with real estate
reserves if they’re stolen. Also, sometimes
market value, because the damaged
it takes a few months for the treasurer to
structure is insured, not the location.) It is a
notice that something is wrong, so insuring
• Prohibit the writing of checks to “cash”
number that is directly linked to the item it
three months worth of assessments is a
• Also keep an eye out for checks that
is insuring.
good idea, too.
Fidelity/Crime/Employee Dishonesty
payment (invoices, etc.) • Keep investments in the association’s name (not individual board members)
seem out of place. Perhaps payable
After determining how much you will
to a contractor you have never seen
insurance is also directly linked to what
need to insure, you will want to make
performing work on the association.
it is insuring. It is designed to replace
sure the appropriate people are covered
One of the more popular fraud tactics
money that is lost due to a dishonest act,
under the policy. Most policies will include
of late has been making payments to a
so the money becomes the direct link – the “property” that needs insuring. But
board members
company that doesn’t exist (for work that
automatically,
didn’t happen).
but some will
While these suggestions are an
not. With an
excellent way of making it more difficult
“employee
for a board member or manager to take
dishonesty”
money from the association, it does not
policy, some
deter them entirely. For example, take the
carriers do
two-signature requirement for removal
not consider
of money from the reserves. It is good
unpaid board
that at least two people are informed
members to be
that money is being removed from the
“employees.”
reserve account, but if someone is willing
Make sure that
to steal money from the association, it’s a
the definition of
good bet they are also willing to forge a
the insured includes your board members. What about the manager of the
signature to achieve that end. So, knowing that we live in a world
how to calculate the amount to insure
association? If they aren’t paid directly by
where 80% of money stolen from a
requires that you refer to your governing
the association, they may be considered
company is stolen by an employee, it
documents. In an association’s CC&Rs, the
to be contractors and not employees.
doesn’t matter what it is called – having
insurance section often includes a formula
Make sure that the language of the policy
a Fidelity/Crime/Employee Dishonesty
for what is required to be covered under
is expanded to include the managing
policy in place is an important part of
the Fidelity coverage. If, however, your
agent for the association. This takes an
protecting your association from loss.
documents are silent, you need to turn to
adjustment of the actual policy language,
the Federal Government regulations. Most
so getting confirmation of that expansion
government lending institutions require
in writing from your broker or agent is an
that associations with over 20 units carry
excellent way to be sure that it has been
Fidelity insurance. While FNMA (Fannie
done.
Mae) requires that an association carry AT
There are many safeguards that can be
LEAST three months worth of assessments
put in place to help reduce the possibility
in their fidelity coverage, the FHA (now
of a board member or manager stealing
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
Kimberly Lilley is the Director of Marketing for Berg Insurance Agency and can be contacted at Kimberly@BergInsurance.com or at www.BergInsurance.com.
Thank You to our May 21, 2010 Morning Educational Program Pay Less Now or Pay More Later! What you should know about reserve studies & funding
Providing Community Associations with Insurance Solutions BERG INSURANCE AGENCY, INC.
23651 Birtcher Dr., Lake Forest, CA 92630 5055 Avenida Encinas, Suite 100, Carlsbad, CA 92008 800.989.7990 phone 949.586.9877 fax
Sponsors Community Compliance Services Pacific Western Bank Peters & Freedman, LLP Popular Association Banking Pro-Tech Painting Restoration Management Company Sonnenberg & Company, CPAs
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Toll Free 877.277.3970 or 858.277.2228 www.paynepestmgmt.com SA N DI E GO • O RA NG E COU NT Y • LOS A NG E LE S C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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R e n e wi n g
m e mb e r s
Thank you to our chapter members that have renewed their CAI membership. We appreciate your continued support and participation in our chapter. A-1 All American Roofing .......................1997 Action Property Management, Inc. .......2004 Advanced World Concepts, Inc............. 2009 Advantos Systems, Inc............................. 2001 Anderson & Kriger ...................................1984 Any Ferrell . ...............................................2008 Associated Professional Services ...........1984 Association Management Group, Inc. ..1994 AV Builder Corp .......................................2006 Aztec Paving, Inc. . ...................................1990 Barrier Reef COA .....................................2002 Bemus Landscape, Inc. ...........................2004 Bickler Law Offices APC . ........................2000 Blue Skies Landscape Maintenance ......2006 Bob Bartlett ..............................................2008 Bonny Bruner . ..........................................1999 Bruner & Rosi Management, Inc. . .........1999 California Sub-Meters .............................2008 Carefree San Carlos . ...............................1977 Carlsbad-Woodridge H.O.A. . ................1988 Centre City Property Management Company ....................2001 Charles J. Rajca CPA ...............................2009 CityFront Terrace HOA............................ 2003 Claudia Sitta .............................................2007 Coit Services, Inc. . ...................................2010 Colony Homes Mira Mesa ......................1998 Coral Tree Plaza .......................................2010 Country View Condo Assn . ....................1986 Dawn Braddy ............................................2010 Dee Dee Stephens ..................................2006 Dewayne Frost .........................................2009 Donna Baughman . ..................................2008 Donny Disbro ...........................................2009 Dunn-Edwards Corporation ...................2002 EasyTurf, Inc. . ...........................................2008 Ed Roth .....................................................1998 Elaine Zembrycki . ....................................2006 Elite Community Management ..............1991 Ellinor Murphy ..........................................2009 Emercon Construction Inc. .....................2009 Empire Community Painting ..................2008 Epsten Grinnell & Howell, APC . ............1986 ET Water Systems, LLC ...........................2006 First Bank Association Services ..............1993 Friars Village HOA ...................................2010 G4S Secure Solutions USA .....................2006 Gary Furstenfeld ......................................2009 Gloria Olsen .............................................1998 Grand Pacific Resort Management........ 2009 Greco Traficante Schulz & Brick............. 2009 Gregory V. Villard, CPA . ..........................1987 J & M Keystone, Inc. . ..............................2004 Jackie Couzens ........................................2008 James Walker ...........................................2009 Jeff Greene ...............................................2008 Jennifer Elmore ........................................2007 Jim Manning . ...........................................2007
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Pro-Tech Painting Co. . ............................1992 Joel Owens . .............................................2000 Quality Patio Furniture Repair................ 2010 John Alioto ...............................................2010 Rancho Carlsbad Owners Association.. 2000 John Woodruff, III ....................................2008 Reconstuction Experts, Inc..................... 2001 Joanne Diaz ..............................................2008 Reo Terrace HOA . ...................................1995 Joseph Perna . ..........................................2009 ResCom Services, Inc. .............................2004 Hauser Contract .......................................2006 Reserve Data Analysis California LLC . ..2005 Helen Yakely .............................................2006 Restoration Management Company .....2007 Howerton Management Services ..........2007 Richard Ball ...............................................1990 Hudson Management Services, Inc. . ....2009 Robert Fowler . .........................................2002 Hugh Kratz ................................................2000 Ronald Reff................................................2009 Karen Smith ..............................................2009 S.B.S. Lien Services ..................................2009 Keystone-Inland, Inc. ...............................1991 Saddleback Fence and Vinyl Products ..2008 KR Landscape Maintenance, Inc. ...........2007 Samantha Easton .....................................2007 La Mesa Townhouse, Inc. ........................2001 San Lorenza Homeowners Association. 2004 Law Offices of Richard Salpietra ............2001 Seascape Surf Management Corp ........1984 Leonard O’Reilly ......................................2005 Servpro of Centre City/Uptown .............2010 Little & Sons Property Management..... 2007 Sigvard Anderson ....................................1992 Liz Beiner ..................................................1999 Silldorf & Levine, LLP . .............................2004 M & M Business Enterprises . .................2003 Massie-Berman ........................................1994 Sheryl Sharp .............................................2007 Masters Hill Owners Association............ 2009 SmartStreet a Division of RBC Bank ......2004 Matthew Kaddatz . ...................................2008 Sonnenberg & Company, CPAs .............1982 MC Painting.............................................. 2008 Stacy Cabrera ...........................................2005 McCaffery Reserve Consulting............... 2005 Stratus Management ...............................2006 McMillin Lomas Master Association ......2004 Sullivan Construction Management ......2007 McMillin Lomas Verdes II (320)............... 2006 Summer Johnson .....................................2010 Menas Realty Company ..........................2009 Summit Property Management, Inc. .....1994 Meridian Residential Association . .........1995 Sunset Painting ........................................2002 Michael J. Ferrara, CPA . .........................1989 Sunstream .................................................2008 Mission Village Condo Assoc. . ..............1996 Steven Bennett ........................................2003 MSSR, Inc. .................................................2010 Sue Barnett ...............................................2006 Mulvaney, Kahan & Barry ........................1993 Susan Schwartz . .......................................1990 Mutual of Omaha/Condo Certs . ...........2004 Suzanne Dixon .........................................2007 Nancy Unfried ..........................................2006 Teresa Petro ..............................................2006 Newman Replacement Windows, Inc. ..2003 The Brickman Group ...............................2010 Nu Flow America .....................................2010 The Landing HOA.....................................1995 Oaks North Community Center . ...........2010 The Sullivan Law Firm, APLC ..................2010 Oaks North Villas Condominium Tina Baldwin .............................................1988 Association ..........................................1991 Trip Wilson Insurance Agency ................2006 O’Connell Landscape Maintenance ......1999 Union Bank ...............................................2008 Orange Coast Building Services, Inc. . ..1999 Uptown District Owners Association . ...2010 Pacific Backflow Company Inc................ 2009 Varsity Painting .........................................2009 Pacific Properties Service........................ 2006 Ventana HOA ...........................................2001 Pacifica Real Estate Services, Inc............ 2004 Village Park Townhome Corp. #3 . .........1999 Palm Terrace .............................................1998 Village Square HOA................................ 2001 Park Villas North Condominium Vista Del Verde Of Santee ......................1988 Association, Inc.................................... 2005 Wayne Hanson .........................................2006 Park West HOA ........................................2008 Wasserman & Kornheiser LLP ...............1990 Pat Baker . .................................................1998 Western Exterminator Company ...........2009 Patriot Painting, Inc. ................................2006 Western Towing....................................... 2000 Paul Davis Restoration & Remodeling ..2004 Western Tree Service . .............................1988 Paul Miller Company............................... 1990 Westturf Landscape Management ........2006 Payne Pest Management ........................2006 Wikkering Windsor View HOA............... 2008 Pennant Village HOA ..............................1996 Will Smyth................................................. 1981 Peter Ruggiero .........................................2008 William Haifley .........................................2006 Pilgrim Creek Estates HOA ....................2005 Porto Sienna Owners Association .........2008 Continued on page 22April • May • June ProTec Building Services .........................1995
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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Thank you to our 2010 Monte Carlo Night Sponsors HIGH ROLLER
ACE Anderson & Kriger LLP Pacific Western Bank Premier Roofing CA, Inc. Restoration Management Company Rodent Pest Technologies, Inc. Walters Management DISC JOCKEY Pro-Tech Painting R&D Pest Services, Inc. PHOTOGRAPHY Animal Pest Management Benchmark Landscape Del Mar Pacific General Contractors Epsten Grinnell & Howell, APC Green Valley Landscape Peters & Freedman LLP
KING Artistic Maintenance AV Builder Corp Berg Insurance Agency Gothic Grounds Management, Inc. Mt. Helix Pest & Termite Control, Inc. Mutual of Omaha/Condo Certs Nu Flow America, Inc. ProTec Building Services Reconstruction Experts, Inc Steven Smith Landscape, Inc. RAFFLE GRAND PRIZE Clean Earth Restoration Patio Guys ICE SCULPTURE Four Seasons Tree Care, Inc. COFFEE Association Reserves San Diego, LLC Law Office of Laura Kwiatkowski Merit Property Management Pacific Green Landscape, Inc. S.D. Preferred Property Management, Inc SCT Reserve Consultants, Inc. Servpro of Sorrento Valley DECORATIONS Black Mountain Plumbing Massie-Berman Popular Association Banking
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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Proactive Fraud Prevention
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
2
By pamela hazard, CMCA
008 was the beginning of a year of economic turmoil and financial crises that resulted in a housing collapse, mounting foreclosures, and pervasive liquidity constraints. Deteriorating financial conditions – especially in the second half of the year – coupled with the emergence of new payments types and the growth of electronic payments, also opened up new opportunities for payment fraud. There’s no time like the present to make sure your internal fraud control systems are in place and up to par.
That’s because historically, internal fraud losses mount during economic downturns and in the first few months of an economic recovery. “People who before might not have ever entertained the idea of stealing from their company, now they are tempted,” says fraud prevention expert Mark Sullivan, managing director of Kroll Consulting Services. “And given that, companies need to be vigilant.” The Association of Certified Fraud Examiners’ 2008 annual report estimates that U.S. organizations lose about 7 percent of their annual revenue to internal fraud. About 90 percent of internal fraud occurs in a company’s check-writing function, according to the 2009 AFP Payment Fraud and Control Survey. That survey also found a 30 percent increase in attempted fraud from 2007 to 2008, and a 38 percent increase in attempted fraud in the second half of 2008, as the economy worsened. Fraud losses are typically in the thousands of dollars, not hundreds of dollars, for most companies. Yet many companies have cut internal fraud controls – and the people who monitor the controls – as part of their own cost controls, Sullivan says. Your bank should be able to offer you ways to be vigilant. We advise companies to read their banking agreements to understand their liabilities in case of fraud. Then you should take steps such as segregating your check-signing and check-reconciling functions, reconciling your statements regularly, and reviewing your accounts online daily so you Continued on page 28
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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proactive fraud protection Continued from page 27
can quickly flag your bank to problem
procedure is a great way to catch internal fraud.
The 2009 AFP Payments Fraud and Control Survey stated “Nine out
Companies can take these controls
of ten organizations (91 percent) that
a step further, with the added protection
experienced attempted or actual
that comes from the bank reconciling
payments fraud in 2008 were victims
that allow companies to decide whether
check payee names from the customer’s
of check fraud. The percentage of
to approve checks presented for payment
issue file against the names on checks
organizations affected by payments fraud
to your bank that don’t reconcile with
presented for payment.
via other payment methods were:
transactions. The best protection is from products
your payment records. Banks often call
The fees for the service vary by type,
• ACH debit (28 percent)
these products “Positive Pay” and “Payee
transaction and financial institution, but
• Consumer credit/debit cards (18 percent)
Positive Pay.”
generally range from $55 to $100 a month.
• Corporate/commercial cards (14 percent)
Here’s how these products work:
That’s a pretty low cost, when you consider
• ACH credits (seven percent)
Customers send their bank their
the potential savings.
• Wire transfers (six percent)
issue file, with a record of each check
For instance, these services recently
written that includes the account number,
stopped a large fraudulent check
ACH Fraud
serial number, dollar amount and issue
presented for payment and a large
• Seventeen percent of organizations that
date. As checks are presented to the
fraudulent wire transaction before each
were victims of ACH fraud during 2008
bank for payment, the bank reconciles
was paid. In each case, the customer had
experienced financial loss as a result.
the information on the check against
the extra security service and the bank
the information in the issue file – and
was able to flag the transactions and stop
loss as a result of ACH fraud generally
holds any discrepancies for customers to
them.
admitted they did not follow best
approve or reject. Flagging checks that have been altered or written outside the normal issue
However, as if there weren’t already
• Organizations that suffered a financial
practices and/or neglected to execute
enough threat… along comes electronic
their own business banking plan
fraud.
expeditiously as they should have. Fiftyfive percent of organizations did not make use of blocks or ACH debit filters, and 36 percent did not use ACH positive pay.
Business-to-Business Card Payments Fraud • Seventy-eight percent of organizations that experienced fraud via the use of an organization’s own corporate/commercial card indicates that the fraud was perpetrated by an external party. • Seventy percent of such organizations report that the fraud was committed by an unknown external party. • Eleven percent of such organizations indicate that the fraud was committed
Proud recipient of the SDCAA 2009 Mark of Excellence Award
by a third party, such as a vendor, professional services provider or business trading partner. • Forty-four percent of organizations subject to corporate/commercial card
License No. PPO 15264
fraud during 2008 suffered actual financial losses resulting from the fraud.
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
We Have the Answers To Your Legal Questions — When You Need Them. • Community Association Law
• • • •
– General Counsel – Inspector of Elections Real Estate Disputes Insurance Disputes Construction Law Personal Injury Law
www.salpietra.com
• Just one out of six organizations that
and/or the organization does not issue a
accepted corporate/commercial cards
sufficient number of checks (17 percent).
from its business-to-business partners
Organizations can develop and/
858.756.2233
• Sixty percent of organizations have separate bank accounts for checks and ACH payments
suffered a financial loss resulting from
or modify internal business processes
The use of checks for payments
fraud using such cards.
to mitigate potential payments fraud
is declining. According to The 2007
risks. Among the processes considered
Federal Reserve Payments Study (www.
important include:
frbservices.org/files/communications/
• Stopped providing payment instructions
pdf/research/2007_payments_study.pdf),
Fraud Control Organizations turn to a number of fraud control services provided by their banks, including: • Positive pay/reverse positive pay (82 percent) • ACH debit blocks (71 percent)
by phone or fax (86 percent) • Increased use of electronic payments for
more than two-thirds of all U.S. noncash payments were made electronically
business-to-consumer and business-to-
during 2007. The number of checks used
business transactions (82 percent)
for payment fell by 7 billion between
• Reduced the number of bank accounts
2003 and 2006. Although the volume of
• ACH debit filters (55 percent)
(82 percent)
checks is declining, checks are still the
• Payee positive pay (50 percent)
Organizations also use separate
most widely used payment instrument
• “Post no checks” restriction on
accounts for different payment methods
for businesses. The 2007 AFP Electronic
depository accounts (34 percent)
as a fraud control technique. For example,
Payments Survey found that 74 percent
Organizations may opt out of
• Seventy-five percent of organizations
of business-to-business payments
particular fraud control services for a number of reasons: their management is confident that the organizations’ internal
maintain separate accounts for different
were made by checks. But checks also
payment methods and types
continue to be the preferred target for
• Seventy-one percent have separate
processes are adequate (47 percent),
accounts for disbursement and
the service is too expensive (20 percent),
collections
criminals committing payments fraud. Nine out of ten organizations (91 percent) Continued on page 30
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
29
However, large organizations with annual revenues over $1 billion – which are more likely to make/use electronic payments – are also more likely to have experienced an increase in fraud from ACH debits and wire transfers. Fraud from accepting consumer credit/debit card payments was more likely to occur in small organizations (with annual revenues under $1 billion) than in large organizations. There’s no better time than now for your company to redouble its efforts to proactive Fraud Protection Continued from page 29
that experienced attempted or actual
universal incidence of attempted or actual
identify and stop internal and external
check fraud of greater than 90 percent.
fraud. Ask your banker for help to ensure
The growth in check fraud has far
that you have the right in-house controls
payments fraud in 2008 were victims of
outpaced the growth in electronic
in place, and that your bank has the right
check fraud. This percentage is slightly
payments fraud. Of the organizations that
programs working to protect you.
lower than that reported for 2007 (94
experienced an increased number of fraud
percent).
attempts during 2008, 82 percent report
Among organizations that experienced
more check fraud while only 18 percent
an increased incidence of payments fraud
report more consumer credit/debit card
in 2008 compared to 2007, 82 percent
fraud and just 14 percent more ACH fraud.
Pamela Hazard, CMCA is a Vice President/Team Leader for Union Bank’s HOA Banking Services, in California, Oregon, and Washington. Pamela can be reached at Pamela.Hazard@unionbank.com or (800) 669-8659.
indicate that check fraud increased over the past year. Eighteen percent
fraud control tips
report higher levels of consumer credit/ debit card fraud and 14 percent report
Limit the number of signers on your company checking account.
increased fraud involving ACH debits. Electronic payments can offer organizations more fraud control. Survey respondents indicate that organizations were much less likely to be subject to fraud from electronic payments than from checks. Among organizations that were victims of attempted or actual payments fraud in 2008, 28 percent report ACH debit fraud in 2008, up slightly from 26 percent in last year’s survey. The prevalence of fraud involving consumer credit/debit cards increased eight percentage points to 18 percent. The incidence of fraud via other payment methods was relatively unchanged
Segregate your finance tasks by assigning different workers to issuing checks, reviewing payment discrepancies and approving payments. Protect your check paper stock by using online-image storage for canceled checks, rather than having paper copies returned to your office. Watch your employees for signs of stress in their lives that may tempt them to commit fraud. Signs include getting collector calls at work, discord at home, loss of a spouse’s job, loss of a car or other major possession. Watch for employees who repeatedly decline to take vacation time – they might be wary of exposing a fraud scheme to their substitute. Test your payment systems routinely. For example, run a report that shows you the day and time of day that checks are written against your company accounts, then compare those to the regular work hours of your accounts payable staff. Investigate any discrepancies for potential fraud. Familiarize yourself with your bank’s depositor’s contract and with liability for fraud under the Uniform Commercial Code.
from the previous year: 14 percent of organizations report corporate card fraud, seven percent report ACH credit fraud, and six percent report wire transfer fraud. The frequency of electronic payment fraud contrasts significantly with the nearly 30
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
Use a shredder to destroy outdated financial data. Have your employees bonded when appropriate. Use account blockers and filters to reject specific transactions. Reconcile your online accounts daily.
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C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
31
Complying with the New Federal Lead-Based Paint Rules By Jennifer L. James, Esq
O
n April 22, 2008, the Environmental Protection
Who Must Comply?
Agency (EPA) issued a rule requiring the use of
In general, anyone who is paid to perform work that
lead-safe practices and other actions aimed at
disturbs paint in housing and child-occupied facilities built
preventing lead poisoning (the “Rule”). Under
before 1978 must comply. This may include, but is not
the Rule, beginning April 22, 2010, paid contractors performing
limited to: contractors, home renovation companies, window
renovation, repair and painting projects that disturb lead-
replacement contractors as well as painters, plumbers,
based paint in homes, child care facilities, and schools built
carpenters, electricians, maintenance workers, and landlords
before 1978 must be certified and must follow specific work
who perform repairs and renovations themselves. Note: This
practices to prevent lead contamination.
Rule does not apply to homeowners painting or renovating their own home.
Scope of the Rule The new regulation applies to all renovations performed for compensation in target housing (pre-1978) and child-occupied facilities, with the following exceptions:
Certification Requirements: • Certification includes an eight-hour training course from an EPA-approved training provider.
• Housing built in 1978 or later
• Lead-Safe practices
• Housing for elderly or disabled persons, unless children under
• Contractors must use lead-safe work practices and follow
age 6 reside there
three (3) simple procedures:
• Zero-bedroom dwellings (studio apartments, dormitories, etc.)
• Contain the work area
• Housing or components declared lead-free by a certified
• Minimize dust
inspector or risk assessor • Minor repair and maintenance activities
• Clean up thoroughly Contractors who perform renovation, repairs, and painting jobs are required to:
Minor Repair Minor repair and maintenance activities are excluded from the Rule. Minor repairs and maintenance activities are activities including minor heating, ventilation or air conditioning work, electrical work, and plumbing, that disrupt 6 square feet or less of painted surface per room for interior activities or 20 square feet or less of painted surface for exterior activities. Note: window replacement and demolition of painted surface areas are always subject to the Rule. 32
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
• Provide you with a copy of EPA’s lead hazard information pamphlet • Provide you with a copy of the Contractor’s state lead training certificate • Explain what lead-safe methods will be used to perform the job • Ask you to share the results of any previously conducted lead tests
• Provide you with references from at least three recent jobs, if any, involving homes
Rebuilding Communities
built before 1978 • Keep records to demonstrate that the
n
Contractor has been trained in lead-safe
n n
work practices
n n
Lead Test Kits
Reconstruction Renovations Repairs Maintenance New Construction
The EPA is currently evaluating the effectiveness of lead test kits but currently advises that these kits should not be considered reliable. Rather, the EPA advises you to hire a qualified professional to perform an evaluation. Trained professionals use a range of methods to check for lead, including visual inspection of paint condition and location, a portable
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tests of paint samples, and surface dust tests. You may contact the National Lead Information Center (NLIC) for a list of professionals in your area.
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How Does This Affect Community Associations? If the association is responsible for exterior maintenance, as is the case in condominium developments and some planned developments, it will need to comply with this Rule. Additionally, if the association acquires title to a unit or lot which it intends to rent, then the association must comply with the Rule as applied to that unit or lot. (The association may acquire title to a lot or unit through foreclosure of a lien for delinquent assessments if the property reverts back to the association at its foreclosure sale by default.) Community association managers are not required to be certified, however, they should confirm that all contactors hired to do any renovations subject to this Rule are certified.
Jennifer James, Esq. is an attorney with Epsten Grinnell & Howell, APC.
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
33
Hom e o w n er s ’
c o r n er
A Case Study:
Review/Audit of Financial Statements and Other Board Actions Readers of this column are encouraged to send their opinions on the above and suggestions for future columns to samdolnick@juno.com or by phone, 619-6974854. Sam Dolnick has served as president of his association, is a former homeowner representative of the San Diego Chapter Board of Directors, former homeowner trustee of CAI National, and former director of the CAI Foundation for Community Association Research. He is currently homeowners’ delegate on the California Legislative Action Committee, and president of the Baker/ Dolnick Education Foundation.
Guest articles are always welcome!
C
ommon Assessment’s Summer
that the directors they elect, and in turn, the
2009 issue contained a
management employed is really functioning
Homeowners’ Corner article
on behalf of the homeowners. Now, for the
“Review or Audit of Financial Statements: Which One Protects the Association
details. Item 1: The association’s governing
Best.” This article, in prior issues,
documents state: “An external audit by a
detailed differences between the two,
certified public accountant shall be required
provided information from state statutes,
with respect to such financial statements
the associations’ declaration, and the
for each fiscal year.” The word “shall”
Professional Standards of the American
mandates that an audit be performed.
Institute of Certified Public Accountants. Previous articles discussed the fiduciary
Item 2: Civil Code §1365 states: “Unless
responsibilities of the board of directors
the governing documents impose more
with the need to pay attention to the
stringent standards, the association shall
association’s governing documents and
prepare and distribute to all of its members
state statues.
the following documents… (c) A review of
Recently, a common interest homeowner, who takes time to read the
the financial statements…” Please note that the association’s
materials that the association sends,
governing documents impose more
presented information and documentation
stringent standards than a review; the
that provides an excellent case study to
they also call for an external audit to be
what extent the association’s president,
conducted.
board of directors, management firm, and certified public accountant (CPA) actually
firm sent to the association for the 2007
During the course of this article you will be
fiscal year states: “Enclosed is a copy of
asked whether or not the four entities are
the certified audit presenting the financial
fulfilling this duty to the association.
position of the association…” It further
The purpose of this case study is not
34
Item 3: A letter from the management
fulfilled their fiduciary responsibilities.
states “I suggest that you review the report
to name names; the purpose is to bring to
contents, keeping in mind that the audit
homeowners’ attention the requirement
is based…” And again: “Retain this audit
to be vigilant, to be familiar with their
report with your permanent ownership
governing documents and to make sure
records…” Please note that the word audit
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
is used four times in the management letter. Item 4: Here is a quote from the CPAs Accountant’s Report. “I have reviewed the accompanying balance sheet of xxxxxxxxxx Association as of December 31, 2007… A review consists principally of inquiries of association personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit ... the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, I do not express such an opinion.” The accountant’s reports for fiscal years ending in December 31, 2006, and December 31, 2008 contain the same wording as shown in the prior sentence. A review was conducted although the CC&Rs mandates an audit. Note the difference in wording between Items 3 and 4. The Accountant’s Report (Item 4) states a review of the December 31, 2007 was conducted and is “substantially less in scope than an audit.” The management firm’s letter (Item 3) to owners repeats in four different places that an audit was conducted. Question: It is obvious both
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the management firm and board misinterpreted the facts? Did the four entities: president, board of directors, management, and CPA adhere to the governing documents and state code to fulfill their fiduciary duties in examination of the financial statements? This case study will now examine
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other areas in this same association. The board of directors is composed of an odd number of board members with the board president being the dominant individual. Item 5: The governing documents state that “a regular meeting of the
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C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
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ssl_CAI_0210:Layout 1
1/19/10
10:23 AM
Page 1
Case study
Improving more than just your property.
Continued from page 35
board.” It also states “At the annual meeting, Members shall elect a board of directors…” Although the annual meeting is mandatory, no annual meeting has been
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held for at least two years. Therefore, elections could not be properly held.
L ANDSCAPE I NC .
Item 6: Corporations Code §7510 (b) states: “A regular meeting of members shall be held on a date and time and with the frequency stated in or fixed in accordance with the bylaws, but in any event in each year in which directors are to be elected at that meeting for the purpose
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of conducting such election…” Question: Did the board of directors fulfill its fiduciary duties requiring them to hold an annual membership meeting and elect a board in accordance with the governing documents?
Lic No. 456160
Item 7: A conflict of interest appears to be involved between the president of the board and the principal of the management firm. It appears the management’s office is owned by the president of the association. Question: Because of the relationship between president of the board and management does a conflict of interest exist? Item 8: Federal and state income taxes were not filed, or paid, for three years: 2005, 2006, and 2007 resulting in the board having to pay penalties and interest in addition to the taxes. The three year delinquent tax years were prepared in 2008 for filing. Question: Did the president and the other board members really examine the monthly financial statements, presented to them by the management firm, as required by state statutes and governing documents? Did the board ever ask if 36
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
income tax forms for the state and federal
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Item 9: Some owners have complained that their units are sustaining water damage from overflowing laundry
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machines that have been installed in units above them in violation of the governing documents. It appears that some owners were given privileges by the directors and management that other owners were not given. The governing documents preclude any laundry machines as the drainage system, as originally installed, was not large enough to carry the extra load. The document states: “There shall be no interference with the established drainage
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drainage is defined as the drainage which
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by the board.” Upon close of first escrow there were no laundry machines in any units. Question: Is the board of directors and management really paying attention
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Committed to
Item 10: The corporate status of the association was, and currently is as of this writing, [March 2010] suspended
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for failure of management or board of directors to file the biennial statement and payment of fees to the Secretary of State. Three statues in the California Codes, which makes it mandatory to file, (Civil Code 1363.6 Required Filing of Biennial Statement, Corp. Code 5008.6 Failure to File biennial Corporate Statement, and Corp. Code 8210 Filing Biennial Statement) were ignored. By losing its corporate status, management and the directors are placing all unit owners in
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F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
Safe & secure Continued from page 11
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Making Sure the Police Can Find Your Home
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• Make sure your street address number is
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clearly visible from the street and is well lighted at night so the police and other
ExpEriEncE
emergency personnel can locate your home easily. Numbers should be at least 4 inches high must be used on individual dwellings and duplexes, and 12 inches high on multiple-unit residential buildings. • Make sure your unit number (in a
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• Provide the police with an entry code if you live in a gated community.
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Identifying Your Property • Etch your driver’s license number on any valuables that might be stolen. • Photograph valuables that cannot be etched. • Keep a detailed, up-to-date record of your valuables. Include type, model, serial number, proof of purchase and fair market value. For structural changes or modifications, as a homeowner, make sure that this falls within the guidelines of the association. As a board, consider implementing policies to provide homeowners the ability to implement these changes within the established guidelines.
This article is reprinted with permission from the City of San Diego Police Department, www.sandiego.gov/ police/prevention/homesec.shtml C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
39
Thank you to our April 16th Trade Show and Conference sponsors Keynote Speaker Sponsor
Breakout #1 Restoration Management Company Peters & Freedman, LLP Pacific Green Landscape, Inc. Epsten Grinnell & Howell, APC Breakout #2 PrimeCo Painting Restoration Management Company
Thank you to our Exhibitors Advanced Painting & Wood Repair American Geotechnical, Inc. Animal Pest Management Antac Pest Control Arborwell Association Reserves San Diego, LLC Bald Eagle Security Services Berg Insurance Agency Black Mountain Plumbing Bob Piva Roofing Company Brinks Services California Sub-Meters California West Patrol Del Mar Pacific Dunn Edwards Paints Emercon Construction, Inc. Empire Community Painting Epsten Grinnell & Howell, APC Interiors: By Design LaBahn’s Landscaping Landsystems Mailboxes ‘R’ Us Master Plumbing and Leak Detection
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40
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
Mt. Helix Pest & Termite Control, Inc. Mutual of Omaha/Condo Certs Nautilus General Contractors New Way Landscape & Tree Service O’Connell Landscape Pacific Western Bank Payne Pest Management Personal Touch Cleaning Popular Association Banking PrimeCo Painting & Construction Pro-Tech Painting Reconstruction Experts, Inc. Restoration Management Company S.B.S. Lien Services Service Master by Rapid Response Servpro Industries Steven Smith Landscape, Inc. Summit Security Three Phase Electric Union Bank US Bank Wells Fargo Western Towing WICR, Inc.
Thank you to our June 2 Trade Show Exhibitors
New Way Landscape & Tree Service
Agricultural Pest Control Services
Pacific Green Landscape, Inc.
Animal Pest Management
Pacific Western Bank
Antac Pest Control
Park West Landscape Maintenance
Arborwell
Patio Guys
Nu Flow America, Inc. O’Connell Landscape
Association Reserves San Diego, LLC
Payne Pest Management
AV Builder Corp
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Bald Eagle Security Services
Premier Roofing CA, Inc.
Bob Piva Roofing, Co.
Pro-Tech Painting
Brinks Services
Restoration Management Company
California Sub-Meters
S.B.S. Lien Services
California West Patrol
San Carlos Cleaning Services, Inc.
Emercon Construction, Inc.
Service Master by Rapid Response
Empire Community Painting
Servpro Industries
Epsten Grinnell & Howell, APC
Smith Architects
Interiors: By Design
Steven Smith Landscape
LaBahn’s Landscaping
Summit Security
Landsystems
Trip Wilson Insurance Agency
Mailboxes’R’Us
US Bank
Master Plumbing and Leak Detection
Varsity Painting
McCaffery Reserve Consulting
Westturf Lansdcape Management
Mt. Helix Pest & Termite Control, Inc. C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
41
A First-Class Board It is Closer Than You Think
By Any Ferrell, CCAM, AMS
G
reat board members are created, not born, with the innate knowledge of association agendas and
RESPECT Respect should be at the forefront of all business dealings
responsibilities. Some would argue that good board
with the board. Respect is essential when working with
members are hard to find, yet with the right support
homeowners, vendors, other board members and the overall
and training, interested homeowners can easily fill this role and
general public. Great board members know that respecting
succeed. Attributes of great board members include the ability
privacy and treating all business partners, as well as each other
to find balance in their roles, contribute to their communities and
with respect will create a professional environment where almost
lead effectively. Community managers need to provide the right
anything can be accomplished.
tools and information to encourage and create an environment
Respect also involves trust. board members are entrusted
where a member of the community can succeed as a board
with a great deal of information, ranging from violations to
member.
delinquencies, and it is the board members’ duty to discourage
There are key success factors that are attributed to becoming a great board member including respect, knowledge, effective leadership and education. Managers can provide support so
and not engage in any gossip relating to their business dealings while serving on the board. Every board member also has a fiduciary responsibility to
that members can develop these skills needed to effectively run
the members of the association in which they serve. A fiduciary
communities.
duty requires the highest standard of care of either equity or law.
42
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
Every board member has been entrusted
must seek and consider information and
demonstrate leadership know that they
to handle the business affairs of the
expertise from outside professionals.
will ultimately save money and accomplish
association with the highest standard of
These professionals help guide board
their project.
care. To this end, every board member
members by arming them with information
must take their fiduciary role seriously and
to make educated decisions. By seeking
maintain trust to the community members
information from the appropriate industry
they serve.
professional, a board can often times help
to board member training. The role of
prevent a lawsuit.
the board member encompasses many
KNOWLEDGE Knowledge is power! As noted earlier, a board member is a fiduciary, one in
EDUCATION Education is important as a foundation
functions and right information should be
EFFECTIVE LEADERSHIP Effective leadership is essential to
available to enhance and expand their experience while on the board.
which has been entrusted the “highest
running a successful company. The same
standard of care.” In order for a board
principles apply to running an association.
common interest industry are a wealth
member to make the appropriate decision
Effective leadership is essential in
of information. Trade organizations, such
for the rest of the community, regardless
every community. Leaders understand
as CAI, offer opportunities from training
of the community’s size, it is vital that
key factors in running the day-to-day
classes, printed information (books/
each board member know as much
operations of their organizations including:
magazines) to online resources. Both
Trade organizations focused on the
information as possible to make informed
Avoiding Micromanagement:
new and current board members are
decisions. When taking on a role as board
Leaders set policy and entrust that
encouraged to attend the Essentials
member, one should be aware that there
management will handle the details.
of Community Association Volunteer
Getting All of the Information:
Leadership course given by CAI. See their
their attendance at board meetings.
Leaders collect all information before
website, www.cai-sd.org, for course dates
This commitment involves reading the
coming to a conclusion. Effective
and locations.
pertinent information prior to a board
leadership does not involve jumping to
meeting, studying and understanding
conclusions.
is a time commitment necessary beyond
financial statements and asking the
Business Partners can also provide good information in their respective fields
Forward Planning: Leaders will not
ranging from the landscape company,
only focus on current issues, but will look
legal counsel to the management
beyond for trends in order to avoid pitfalls.
representative. Business Partners are key
a manager has the opportunity to provide
Leaders consider information and input
partners in running the community and
the tools and pertinent information
from those they serve to enhance their
can provide training, information and
to help the board member succeed.
organization/community for the future.
resources for specific projects or tasks
questions about unfamiliar items. When a new member joins the board,
Before the first board meeting, the
Understanding the Financial Picture:
facing the board.
manager should take the time to meet
Leaders understand the financial picture
with the new member and provide the
of their organization. Similarly, board
can exist with the right support. It’s a
vital information so that the new board
members must understand the finances
matter of providing the necessary tools,
member is equipped to tackle their new
of the community (income, expenses,
information and resources in order to turn
role. Essential tools and resources critical
delinquencies, etc). Board members are
an interested homeowner into a great
for a new board member should include:
responsible for the maintenance and
board member.
past 12-months of minutes, copies of
repair of long-term assets and must
all contracts, copies of all governing
consider these assets when planning and
documents and summary of projects and
budgeting. Board leaders spend money
recent events.
wisely, engaging the appropriate experts
It is also important to note that board
such as construction managers, attorneys
members deal with a variety of subjects
and other experts when dealing with
and trades. As most people are not
large projects. By engaging the right
experts in every field, board members
professionals early, board members who
In conclusion, great board members
Any J. Ferrell, CCAM, AMS is an Executive Vice President at N.N. Jaeschke, Inc., an Associa® Company.
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
43
Service Directory Display advertisers receive a complimentary listing in the Service Directory.
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Leonard Sonnenberg............ 858-457-5252 fax 858-457-2211 lens@sonnenbergcpas.com www.sonnenbergcpas.com
Attorneys Adams Kesler
Adrian Adams...................... 310-945-0280 fax 310-945-0281 www.davis-stirling.com
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Janet Wilcox......................... 619-589-8800 fax 619-464-2600 jwilcox@a-khoa.com www.a-khoa.com
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Jon Epsten, Esq.................... 858-527-0111 fax 858-527-1531 jepsten@epsten.com www.epsten.com
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Katy Krupp........................... 949-554-0700 fax 949-554-0707 kkrupp@feinberggrant.com www.feinberggrant.com
Greco Traficante Schulz & Brick, APC
Peter Schulz......................... 619-234-3660 fax 619-234-0626 pjs@gtlaw.com www.gtlaw.cc
Peters & Freedman, LLP
David M. Peters................... 760-436-3441 fax 760-436-3442 www.hoalaw.com
Law Offices of Richard Salpietra
Rick Salpietra........................ 858-756-2233 fax 858-759-9938 rsalpietra@salpietra.com www.salpietra.com
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John Kiss.............................. 619-296-7232 fax 619-296-7011 summitpropmgt@yahoo.com
Walters Management Company
Joe Farinelli.......................... 858-495-0900 fax 858-495-0909 jfarinelli@waltersmanagement.com www.waltersmanagement.com
Curtis Management Company
Patrick S. Campbell, CCAM ............................................ 858-587-9844 fax 858-587-9972 pcampbell@curtismanagement.com www.curtismanagement.com
Consulting Curtis Management Company
Patrick S. Campbell, CCAM ............................................ 858-587-9844 fax 858-587-9972 pcampbell@curtismanagement.com www.curtismanagement.com
Emergency Restoration Services Clean Earth Restorations Rachel Roberts..................... 619-284-4239 fax 619-284-4279 rachel@cleanearthrestorations.com www.cleanearthrestorations.com
Financial Services Mutual of Omaha Bank / CondoCerts
Cyndi Koester...................... 949-235-8498 fax 888-493-1973 ckoester@cabanc.com www.cabanc.com
First Bank
Jan Hickenbottom................ 800-848-6771 fax 949-477-0255 Jan.hickenbottom@fbol.com www.FirstBankHOA.com
Pacific Western Bank
Ken Carteron........................ 760-432-1335 fax 760-432-1339 kcarteron@pwbonline.com www.pwbonline.com
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
Financial Services cont'd. Union Bank
Michelle Hill......................... 951-281-1402 michelle.hill@unionbank.com www.HOABankers.com
Popular Association Banking
Larry Hooper........................ 714-864-5171 fax 714-864-5190 lhooper@bpop.com www.bpop.com
General Contractors Del Mar Pacific
Julie Villelli............................ 858-792-1500 fax 858-792-0076 www.delmarpacific.com
Insurance Berg Insurance Agency
Kimberly Lilley, CMCA, CIRMS ............................................ 800-989-7990 fax 949-586-9877 kimberly@berginsurance.com www.berginsurance.com
Landscape Maintenance and/or Construction KR Landscape Maintenance, Inc.
Shaunmarie Daly.................. 760-295-9720 fax 760-295-9730 sdaly@krlandscapeinc.com www.krlandscapeinc.com
LaBahn’s Landscaping
Michael Salsberry................. 619-579-9151 fax 619-461-0814 msalsberry@labahns.com www.labahns.com
New Way Landscape and Tree Services, Inc.
Arthur Raybold.................... 858-505-8300 fax 858-505-8305 araybold@newwaypro.com www.newwaypro.com
Pacific Green Landscape, Inc.
Stephanie Lundstrom........... 619-390-9962 fax 619-390-0865 stephanie@pacificgreenlandscape.com www.pacificgreenlandscape.com
Steven Smith Landscape
Gigi Golden-Smith............... 760-745-9916 fax 760-745-1982 ggolden@stevensmithlandscape.com www.stevensmithlandscape.com
Westturf Landscape
Heather Collins.................... 760-650-3120 fax 760-650-3125 heather@westturf.com www.westturf.com
Outdoor Furniture Patio Guys
Laura Terpack....................... 800-310-4897 fax 760-599-4660 commercial@patioguys.net www.patioguys.net
Tree Service New Way Landscape and Tree Services, Inc.
Water Submetering California Sub-Meters
Arthur Raybold.................... 858-505-8300 fax 858-505-8305 araybold@newwaypro.com www.newwaypro.com
Danielle Poanessa................ 858-571-8999 fax 858-571-4470 danielle@calsubmeter.com www.calsubmeter.com
Painting Contractors Pro-Tech Painting
Chris Cena........................... 858-527-0200 fax 858-527-0220 chris@pro-techpainting.com www.pro-techpainting.com Serving San Diego County for over 25 yearS
Pest Control Payne Pest Management
Willie Payne......................... 858-277-2228 fax 858-277-2212 wpayne@paynepestmgmt.com www.paynepestmgmt.com
Expert Care for a Beautiful, Trouble-Free Landscape.
Reserve Studies Association Reserves San Diego LLC
Matthew Swain, RS............. 619-567-5239 fax 619-568-3564 mswain@reservestudy.com www.reservestudy.com
760.295.9720 www.krlandscapeinc.com
• Professional Landscape Maintenance Service for Community Associations • State of the Art Water Budgeting and Management • We Make It Easy for You, You Deserve It License #427886
Sonnenberg & Company
Leonard Sonnenberg............ 858-457-5252 fax 858-457-2211 lens@sonnenbergcpas.com www.sonnenbergcpas.com
Roofing Premier Roofing
Bill Capito............................. 619-667-4565 fax 619-667-1281 billc@premierroofingca.com www.premierroofingca.com
Security Services Bald Eagle Security
Dmitriy Todorov................... 619-230-0022 fax 619-230-6610 dmitriyt@baldeaglesecurity.com www.baldeaglesecurity.com
Towing Western Towing
Kathy Tighe.......................... 619-297-8697 fax 619-296-2822 denisetb@westerntowing.com www.westerntowing.com
C o m m o n A s s e s s m e n t Ma g a z i n e • F A L L 2 0 1 0
45
Case study w ha t ’ s n e w i n Sa n D i e g o ?
Continued from page 37
Question: Is management and board of
DESIGNATED
Tina Palacios has earned her Community Insurance Risk Management Specialist (CIRMS) designation in recognition of her high level of Insurance expertise and competency servicing the common interest development industry. Tina Palacios is one of the youngest Insurance professionals to earn this distinction. Congratulations, Tina!
ADDITIONS
RSI Roofing of San Diego is pleased to announce the hiring of John Sawaya as the new Operations Manager. John comes to RSI with thirty-one years of experience, with six of those years served as the Operations Manager at another local roofing contractor. Before that, John was the General Manager at Aztec Roofing for twentytwo years. John was born and raised in San Diego, currently residing in El Cajon with his wife and five kids. “We are excited to have John join the RSI
team where he will bring substantial expertise in a role that is vital to the companies operating procedures and overall growth,” says David Susi, President. Berg Insurance Agency is pleased to announce the newest addition to their team: Marianne Pick, Commercial Sales and Marketing Representative. With more than two decades of sales and management experience, Marianne has developed a keen awareness of how to meet a community manager’s needs. In 2003, she entered into the Homeowners Association marketplace, where her sales ability and organizational skills enabled her to build excellent relationships with Community Managers.
directors, by being so neglectful, fulfilling their fiduciary responsibilities to the condominium unit owners? The items in this case study appear to be extreme. It appears from the documentation, that management, the president and board of directors are not aware of their fiduciary responsibilities; they are not aware of what their governing documents contain; they are not aware of the state statutes; they rely upon the board president and management to run the association without any oversight. Again, to repeat, the purpose of presenting this case study of an actual common interest association is to alert all homeowners to be vigilant, to read the documents, especially financial, presented by the board and management. The money being spent that homeowners pay in regular, special and emergency assessments must be monitored by the homeowners themselves.
SEPTEmber 22-23 CALL the chapter office for more information 619-299-1376
46
F A L L 2 0 1 0 • C o m m o n A s s e s s m e n t Ma g a z i n e
Golf Classic Sponsors
September 17, 2010 • Coronado Municipal Golf Course Eagle
Par
Putting Contest
Animal Pest Management
Pacific Western Bank
AV Builder Bald Eagle Security Services
Driving Range
Clean Earth Restorations
Sullivan Construction Management
Del Mar Pacific
Birdie
Emercon Construction Inc.
Lunch
Epsten Grinnell & Howell APC
Emergency Services Restoration
Peters & Freedman LLP
Mt. Helix Pest & Termite Control, Inc.
Law Offices of Richard Salpietra
Popular Assocation Banking
Mutual of Omaha/Condo Certs
Master Plumbing & Leak Detection
PrimeCo Painting, Inc.
Reconstruction Experts
MC Painting
Restoration Management Company
RSI Roofing
Pacific Green Landscape, Inc.
The Brickman Group
Payne Pest Management
Drink Bucks
US Bank
Premier Roofing CA, Inc.
Restoration Management Company
Western Towing
Hole in One Landsystems
Pro-Tech Painting S.B.S. Lien Services
Water
Service Master by Rapid Response
Aztec Paving, Inc. California Sub-Meters Rodent Pest Control Summit Security
If your company is interested in becoming a sponsor for this or any other event please call the chapter office at 619-299-1376.
1081 Camino del Rio South Suite 207 San Diego, CA 92108
2010
CAI-SAN DIEGO Marketing Plan MeMbers
Platinum
Gold animal Pest manaGement Bald eaGle security del mar Pacific General contractors mutual of omaha Bank/condocerts Pacific Western Bank Peters & freedman, llP PoPular association BankinG Premier roofinG of california, inc. Pro-tech PaintinG co. restoration manaGement comPany
Bronze Anderson & Kriger Artistic MAintenAnce AssociAtion reserves sAn diego, LLc Av BuiLder Berg insurAnce Agency cLeAn eArth restorAtions eMercon construction FeinBerg grAnt MAyFieLd KAnedA & Litt, LLP interiors: By design LABAhn’s LAndscAPing LAndsysteMs, inc. LAw oFFices oF richArd sALPietrA MAster PLuMBing & LeAK detection Mt. heLix Pest And terMite controL new wAy LAndscAPe & tree service o’conneLL LAndscAPe PAciFic green LAndscAPe PAtio guys reconstruction exPerts rodent Pest technoLogies sBs Lien services serviceMAster By rAPid resPonse sKy security services us BAnK westturF LAndscAPe MAnAgeMent